Vishnu Prakash R Punglia lists at Rs 165, over 66% premium to issue price
Vishnu Prakash R Punglia, an engineering, procurement, and construction (EPC) company, made a highly successful debut on the stock market on September 5th, with its shares trading at a remarkable 66.7 percent premium to its issue price of Rs 99.
The company’s shares began trading on the NSE (National Stock Exchange) at Rs 165 per share and on the BSE (Bombay Stock Exchange) at Rs 163.30 per share. This strong market debut was in line with analysts’ expectations, considering several positive factors. These factors include the robust subscription numbers during its initial public offering (IPO), the government’s increasing focus on infrastructure development, the company’s strong order book, and its reasonable valuations.
The IPO garnered significant interest from investors, with a massive subscription rate of 87.82 times the offered shares. This strong demand came from all categories of investors, including qualified institutional buyers and high net worth individuals (non-institutional investors). Notably, qualified institutional buyers subscribed 171.69 times their allocated shares, while high net worth individuals were equally aggressive, subscribing 111.03 times their quota.
This successful listing indicates investor confidence in Vishnu Prakash R Punglia’s growth prospects and the positive outlook for the infrastructure sector in India. It also highlights the enthusiasm for new offerings in the stock market.
Vishnu Prakash R Punglia, the Rajasthan-based company, has achieved a successful milestone by completing its initial public offering (IPO) and raising a total of Rs 308.88 crore. Notably, this IPO exclusively comprised fresh issue shares, signifying that all the capital generated will be directly infused into the company for various strategic purposes.
The strategic utilization of the IPO proceeds, excluding expenses related to the offering, is slated for several key objectives. These encompass the acquisition of equipment and machinery, ensuring sufficient working capital to meet operational requirements, and fulfilling general corporate needs. This allocation strategy underscores the company’s intent to bolster its growth prospects, enhance operational efficiency, and address ongoing corporate necessities.
Overall, the successful completion of the IPO and its well-structured utilization of funds reflect Vishnu Prakash R Punglia’s commitment to advancing its business objectives and strengthening its financial position for future endeavors.
One of the standout aspects of Vishnu Prakash R Punglia that has garnered praise from analysts and investors is its impressive financial performance. Over the past three years, the company has demonstrated a remarkable Compound Annual Growth Rate (CAGR) of approximately 55 percent in its revenue. This signifies robust business expansion and a positive trajectory, which has likely contributed to the enthusiasm surrounding its IPO.
Additionally, the company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) has experienced substantial growth, with an 86 percent CAGR from FY21 to FY23. This growth has been accompanied by an improvement in EBITDA margins, rising from 9.3 percent in FY21 to 13.4 percent in FY23. These positive trends in financial performance are attributed to favorable raw material prices and more efficient absorption of overhead costs, as highlighted by Geojit Research.
Analysts are offering a positive long-term outlook for investors who were allotted shares in Vishnu Prakash R Punglia (VPRPL). They recommend that investors continue to hold their investments in the company, citing its high growth potential and the expectation that it will reward investors even after its listing on the stock market. For those who are considering buying VPRPL shares on the day of listing, analysts suggest accumulating shares if the initial listing price is affected by any market-related factors.
However, it’s important to note that there are some potential risks associated with the company. Two key risks highlighted by analysts are client concentration and regional concentration. Approximately 93.5 percent of the company’s FY23 revenue came from its top 10 clients, indicating a high level of dependence on a limited number of customers. Additionally, a significant portion of the pending order book, approximately 62 percent, is concentrated in the state of Rajasthan. These concentration risks could pose challenges for the company in terms of diversification and revenue stability.
Investors should carefully consider these risks alongside the growth potential and positive outlook when making their investment decisions in VPRPL.
